Asian Stocks Set for Biggest Three-Week Gain in Two Years

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Asian stocks rose, with the regional benchmark index on course for its biggest three-week advance in two years, as a weaker yen boosted Japanese shares.

Volumes were below average with markets in Hong Kong, China, South Korea and Taiwan closed for holidays. Nikon Corp. (7731), a camera maker that gets 85 percent of sales outside Japan, climbed 6.2 percent. Shiseido Co. surged 4.7 percent in Tokyo as Citigroup Inc. recommended buying shares of the comestics maker. Declines among raw-material shares limited gains on the regional benchmark gauge, which is on course for the biggest three-week advance since October 2011.

The MSCI Asia Pacific Index rose 0.2 percent to 141.38 as of 11:03 a.m. in Tokyo, poised for a third straight week of gains and extending a four-month high. The measure climbed 2.9 percent this week through yesterday after the Federal Reserve unexpectedly refrained from reducing stimulus measures, saying it wants more evidence of an economic recovery before paring its $85 billion-a-month in bond purchases. A Bloomberg survey of economists had forecast a $5 billion reduction.

“The dollar will strengthen against the yen in the long run on the U.S. economic recovery, which is good for Japanese stocks,” said Juichi Wako, a Tokyo-based equity market strategist at Nomura Securities Co., the nation’s biggest brokerage. “It’s a matter of when the Federal Reserve will start tapering its stimulus.”

Regional Gauges

Japan’s Topix (TPX) index gained 0.4 percent. Australia’s S&P/ASX 200 Index (AS51) declined 0.4 percent, retreating from a five-year high. New Zealand’s NZX 50 Index lost 0.5 percent, retreating from a record high. Singapore’s Straits Times Index fell 0.4 percent. Futures on the Standard & Poor’s 500 Index slipped 0.1 percent.

The Asia-Pacific gauge rallied 9.1 percent this year through yesterday amid signs China’s economic growth is stabilizing. The gauge yesterday traded at 13.8 times estimated earnings, compared with a multiple of 15.6 for the S&P 500 and 14.4 times for the Stoxx Europe 600 Index, data compiled by Bloomberg show.

Japan’s Topix climbed 41 percent this year through yesterday, the most among developed markets, amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation through unprecedented monetary easing. About 13 trillion yen ($131 billion) was added to the market capitalization of the Topix last week, according to data compiled by Bloomberg, after the city was selected to host the 2020 Olympic Games.

Tokyo Land

Land prices in Japan’s three largest cities rose for the first time in five years, signaling a return of confidence among homebuyers and investors. The average price of land in Tokyo, Osaka and Nagoya gained 0.1 percent as of July 1, compared with a 1 percent drop a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in a report today.

“Things are picking up and companies are more confident about the future” in Japan, Clay Carter, head of international equities at Perennial Value Management Ltd. in Sydney, told Bloomberg TV. “We’re overweight Japan and confident on Japan, but not wildly bullish. The confidence that companies have about the medium term is a positive for us. We want to see that in the earnings numbers and the macro-economic numbers that will be coming out in the next three months.”

The yen was little changed after falling 1.5 percent against the dollar yesterday.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York closed little changed yesterday, on track for a third weekly advance.

 

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